Following the publication of the tariff rules on Tuesday, it is now official that Mexico, Canada and the United Kingdom are the countries that, to date, have the best access conditions to the U.S. market, although the levies themselves go against the T-MEC.

The United States reduced from 25% to 15% the approximate average tariff on imported cars originating in Mexico, informed Marcelo Ebrard, Secretary of Economy.

The lower rate is conditional on the vehicles complying with the rules of origin of the Mexico-U.S.-Canada Agreement (T-MEC). Otherwise, imports will pay a 25 percent tariff.

President Donald Trump imposed a 25 percent tariff on certain auto imports, effective April 3, 2025, and certain auto parts imports effective May 3, 2025.

For autos, the United States applies exceptions to three nations: “a discounted tariff” to Mexico and Canada, and an annual quota for the United Kingdom of 100,000 units with a 10 percent tariff.

Regarding the former, the U.S. Department of Commerce published this Tuesday in the official gazette (Federal Register) the procedures to obtain discounts in tariffs on auto imports, which only apply to Mexico and Canada if they comply with the rules of the T-MEC and can be retroactive as of April 3, 2025.

“Vehicles that are made in Mexico will have a discount from that tariff (…) by around 40%, but it may be that in some cases it will be higher,” he said during a COA conference in Mexico City.

He explained it in this other way: “From now on and from the time this new rule goes into effect, vehicles that are made in Mexico and go to the United States, instead of paying 25 percent, will pay around 15 percent.”

Trump’s Proclamation states that automobiles that qualify for preferential tariff treatment under T-MEC may submit documentation to the Department of Commerce to identify the U.S. content in each model imported into the United States.

In 2024, the United States imported approximately 8.1 million automobiles from the world with values totaling approximately $248.8 billion, based on the categories of automobiles described in Annex I of the referenced Proclamation.

Among these automobiles, approximately 3.7 million (approximately 46%) are included in U.S. trade statistics that have been declared eligible for T-MEC preference.

Within that volume, 1.07 million of these eligible cars were imported from Canada, and 2.66 million cars were imported from Mexico.

In theory, these discounts represent the upper limit of cars that could qualify for tariff exemptions on the U.S. content of these imports.

According to analysts, the United States violates the T-MEC by imposing tariffs on cars imported from Mexico or Canada that comply with the T-MEC.

“Today an agreement is published that I see as very positive, which establishes preferential treatment for the automotive industry in Mexico and Canada, in relation to the automotive industry of other countries in the world,” said Ebrard.

Then he added: “This decree, which is being published today, says that on average between 40, maybe 50% of the tariffs for automotive vehicles will be reduced, 40 to 50%, with respect to other countries in the world”.

At the event, Susan Segal, President and CEO of the Americas Society/Council of the Americas, commented: “I am convinced that the concept of an integrated North America, the T-MEC will continue, because in the end it continues to benefit all three countries.

Source: El Economista

The entity reaffirms its position as an automotive hub with the inauguration of the second industrial plant of San Luis Dasung, a subsidiary of the Malaysian group MK TRON, located in the Logistik II Park.

The expansion represents an investment of US$9 million and the generation of 250 new direct jobs, bringing the company’s total workforce to 700 workers.

Dedicated to the components for the automotive industry in Mexico and the United States, San Luis Dasung strengthens its operational capacity with an industrial complex equipped with Korean automated technology.

This advanced infrastructure not only improves production efficiency, but also demands specialized technical personnel, generating well-paying jobs and raising the region’s industrial profile.

During the inaugural event, the head of the Secretariat of Economic Development (Sedeco), Jesús Salvador González Martínez, emphasized that San Luis Dasung’s investment reflects the confidence of foreign capital in the state. He also highlighted the importance of collaboration between the public and private sectors as a key to consolidate San Luis Potosí as a pole of attraction for new investments.

With this expansion, San Luis Dasung not only expands its footprint in Mexico, but also boosts regional development through skilled technical employment, technological innovation and export-oriented supply chains.

Source: Mexico Now

Hours after his global trade sanctions package went into effect, and amid a volatile Treasury bond market, Donald Trump put the brakes on his tariff war and announced a 90-day pause for most U.S. trading partners, with the exception of China.

Trump’s decision, which took even his trade representative, Jamieson Greer, who was testifying at the time in the House of Representatives, by surprise, came amid not only a drop in the major New York Stock Exchange indexes, but an imbalance in the Treasury bond market, the most solid instruments in the U.S. financial system.

Traditionally, bond yields rise in periods of financial volatility, but on this occasion – for the first time in recorded history – yields fell, which could reflect capital flight, according to experts.

Trump’s decision raises tariffs on China to 125 percent, but maintains a reciprocal levy of 10 percent for most countries during the pause period.

The news triggered one of the steepest stock market rallies in 16 years, partially recovering the losses of the past two weeks.

In the case of Mexico and Canada, Scott Bessent, Secretary of the Treasury, sowed confusion when he agreed to reporters that the two U.S. trading partners would be taxed at 10 percent, like all other countries except China.

However, the White House clarified that they were never on the reciprocal tariff list and will continue to be subject to the 25 percent tariff on steel and aluminum, as well as 25 percent on auto exports that do not comply with T-MEC rules of origin.

Without acknowledging a failure of the strategy, President Trump told reporters that more than 75 countries have already approached the United States to try to reach some agreement.

“Now the bond market looks beautiful,” he wrote shortly thereafter on the social network Truth Social.

Countries that had already offered zero tariffs on U.S. goods include Vietnam, Argentina and Israel, among others.

His decision came amid deepening fractures in conservative ranks, especially in the U.S. Senate, which were reflected during Greer’s appearance.

A parade of foreign officials to Washington is now expected, as requested by the White House, to seek to negotiate bilateral agreements and try to clear the uncertainty in the global trade and financial system over the next 90 days.

Source: El Financiero

COUNTERING TRADE PRACTICES THAT THREATEN TO IMPAIR U.S. NATIONAL SECURITY: Today, President Donald J. Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imports of automobiles and certain automobile parts, addressing a critical threat to U.S. national security.

• President Trump is taking action to protect America’s automobile industry, which is vital to national security and has been undermined by excessive imports threatening America’s domestic industrial base and supply chains.
• The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary.
• Importers of automobiles under the United States-Mexico-Canada Agreement will be given the opportunity to certify their U.S. content and systems will be implemented such that the 25% tariff will only apply to the value of their non-U.S. content.
  • USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content.
• The President is exercising his authority under Section 232 of the Trade Expansion Act of 1962 to adjust imports to protect our national security.
  • This statute provides the President with authority to adjust imports being brought into the United States in quantities or under circumstances that threaten to impair national security.

MAINTAINING A RESILIENT DOMESTIC INDUSTRIAL BASE: President Trump is taking action to end unfair trade practices that jeopardize U.S. national security.

• The COVID-19 pandemic exposed critical vulnerabilities and choke points in global supply chains, undermining our ability to maintain a resilient domestic industrial base.
• Legislation, pre-existing trade agreements like the USMCA, revisions to the U.S.-Korea Free Trade Agreement, and subsequent negotiations have not sufficiently mitigated the threat to national security posed by imports of automobiles and certain automobile parts.
• These new tariffs aim to ensure the U.S. can sustain its domestic industrial base and meet national security needs.

STRENGTHENING AMERICA’S MANUFACTURING INDUSTRY: President Trump’s decision to implement tariffs on imports of automobiles and automobile parts will protect and strengthen the U.S. automotive sector.

• Foreign automobile industries, bolstered by unfair subsidies and aggressive industrial policies, have expanded, while U.S. production has stagnated.
• In 1985, American-owned facilities in the United States manufactured 11.0 million automobiles, representing 97% of overall domestic (American- and foreign-owned) production of automobiles.
• In 2024, Americans bought approximately 16 million cars, SUVs, and light trucks, and 50% of these vehicles were imports (8 million).
  • Of the other 8 million vehicles assembled in America and not imported, the average domestic content is conservatively estimated at only 50% and is likely closer to 40%.
  • Therefore, of the 16 million cars bought by Americans, only 25% of the vehicle content can be categorized as Made in America.
• The United States trade deficit in automobile parts reached $93.5 billion in 2024.
• Currently, the U.S. automobile and automobile parts industry (American-owned and foreign-owned firms) employs approximately one million U.S. workers.
• Employment in automotive parts manufacturing totaled approximately 553,300 jobs in 2024, a decline of 286,000 jobs or 34% since 2000.
• In 2023, Research and Development (R&D) by American-owned automobile manufacturers amounted to only 16% of global R&D spending. R&D by American-owned firms lagged behind the EU, which controlled 53% of global R&D.

TARIFFS WORK: Studies have repeatedly shown that tariffs can be an effective tool for reducing or eliminating threats to impair U.S. national security and achieving economic and strategic objectives.

• A 2024 study on the effects of President Trump’s tariffs in his first term found that they “strengthened the U.S. economy” and “led to significant reshoring” in industries like manufacturing and steel production.
• A 2023 report by the U.S. International Trade Commission that analyzed the effects of Section 232 and 301 tariffs on more than $300 billion of U.S. imports found that the tariffs reduced imports from China and effectively stimulated more U.S. production of the tariffed goods, with very minor effects on prices.
• According to the Economic Policy Institute, the tariffs implemented by President Trump during his first term “clearly show[ed] no correlation with inflation” and only had a temporary effect on overall price levels.
• An analysis from the Atlantic Council found that “tariffs would create new incentives for US consumers to buy US-made products.”
• Former Biden Treasury Secretary Janet Yellen affirmed last year that tariffs do not raise prices: “I don’t believe that American consumers will see any meaningful increase in the prices that they face.”
• A 2024 economic analysis found that a global tariff of 10% would grow the economy by $728 billion, create 2.8 million jobs, and increase real household incomes by 5.7%.

Source: White House

LG Electronics, one of the most traditional consumer electronics companies in the world due to its technological innovation and sales volume, ruled out that among its plans is the valuation of abandoning Mexico.

The company, with white goods and screen assembly plants in Mexico, assured that it will continue with its fifty-year history in the country, with a new investment of US$100 million in 2025 to double the production capacity of its Reynosa, Tamaulipas plant, which will now produce 6.5 million LG OLED televisions for export and domestic consumption.

LG Electronics, ranked among the top three manufacturers of displays and white goods in Mexico, generates a workforce of 6,700 direct jobs in the country, through four production plants and its corporate headquarters in the Valley of Mexico.

LG Electronics has even begun producing components for autonomous vehicles in Mexico’s Bajío region, a new business area that the company has entered in the last five years.

Speculation about LG’s exit from Mexico stemmed from U.S. government reports that the Asian company would move its production to U.S. territory. The White House also suggested that Honda and Samsung would move their production to the United States.

“LG Electronics is not leaving Mexico. Mexico is a strategic country for LG. At LG Electronics we reaffirm our firm commitment to Mexico, a country in which we have maintained a solid presence for more than 50 years, since our plant in Reynosa, Tamaulipas, opened in 1974,” the company said.

“We reiterate our confidence in Mexico and our firm commitment to continue growing and innovating together with our partners, collaborators and customers in this important market,” added LG.

Source: Mexico Now